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DECREE No

DECREE No.56-CP OF SEPTEMBER 18, 1995 OF THE GOVERNMENT PROMULGATING THE REGULATION ON LEASING HOUSES IN VIETNAM TO FOREIGNERS AND VIETNAMESE RESIDING ABROAD

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

To enhance the State management over leasing houses in Vietnam to foreigners and Vietnamese residing abroad;

At the proposal of the Minister of Construction,

DECREES :

Article 1.- To issue together with this Decree the Regulation on Leasing Houses in Vietnam to Foreigners and Vietnamese Residing Abroad.

Article 2.- This Decree takes effect from the date of its signing. The earlier stipulations that are contrary to this Decree are now annulled.

Article 3.- The Ministers, the Heads of the ministerial level agencies, the Heads of the agencies attached to the Government, the Presidents of the People's Committees of the provinces and cities directly under the Central Government shall have to implement this Decree.

On behalf of the Government

The Prime Minister

VO VAN KIET

REGULATION ON LEASING HOUSES IN VIETNAM TO FOREIGNERS AND VIETNAMESE RESIDING ABROAD

(issued attached to Decree No.56-CP of September 18, 1995)

Chapter I

GENERAL PROVISIONS

Article 1.- The economic organizations, political and social organizations and individuals described thereunder (hereafter referred to as renting party) who meet the conditions prescribed in Article 3 of this Regulation are authorized to lease houses to foreigners and Vietnamese residing abroad (hereafter referred to as foreigners) for lodging, for use as headquarters of representative offices, company branches or establishments for business activities as prescribed by law:

1. The housing businesses set up and operating according to law, including enterprises having foreign investment.

2. Other enterprises and organizations set up and operating according to law which have houses under their ownership and have their legal land use right.

3. Vietnamese citizens who have full civil action capacity and have houses under their ownership and have their legal land use right.

Article 2.- The following entities and persons are not allowed to lease houses to foreigners:

a/ The State agencies, Party offices, Vietnamese political and social organizations and individuals are not allowed to lease their offices or houses under State ownership which they are being allowed to manage or use.

b/ The persons who are under investigation for criminal liability, those who are serving their terms, or those whose sentences have not been repealed.

Article 3.- A house to be leased to a foreigner must meet these conditions:

1. It has a clear address (number of house, street, ward...) lying outside the area defined in Item 1, Article 12 of Decree No.04-CP on the 18th of January 1993 of the Government.

2. It forms a separate flat (not sharing any room or passage with another flat).

3. Safe in structure and construction.

4. Meeting the conditions for security and order, environmental sanitation, fire combat and prevention.

5. Not involving a dispute about ownership or utilization right.

Article 4.- The renting party may directly or assign a house renting service business for foreigners to fill the procedures for application, sign house renting contract and carry out the rights and obligations defined in this Regulation. The fee for assignment must not be higher than 2% of the value of the contract stipulated in Article 7 of this Regulation.

In case the owner of the house is not a permanent resident in the province or city where the house for rent is located, he/she must empower another person who is a permanent resident of the locality where the house is located to represent him/her in filling the above necessary procedures, except those in the categories defined in Point b, Article 2 of this Regulation.

Article 5.- A foreigner renting a house for lodge must have a legal permit of temporary residence in Vietnam for six months and more. If he/she rents a house as headquarters of a representative office, or company branch or as an establishment for business activities, he/she must have a permit to establish the representative office, the company branch or for investment cooperation in Vietnam issued by the authorized agency of Vietnam.

Article 6.- The house renting contract signed between the renter and tenant must be done in the prescribed form and certified by the agency issuing permits for house renting to foreigners. The rent rate and the value of the rent written in the contract shall be calculated in Vietnam Dong and shall be converted into US dollars or another convertible currency at the exchange rate announced by the Vietnam State Bank at the time of the signing of the contract.

Article 7.- The land rent rate shall be mutually agreed upon by the two parties. The remittances to the State budget which come under the obligation of the renter shall be based on the rate written in the house renting contract which, however, must not be lower than the rate for tax calculation applied in the locality prescribed by the Ministry of Finance after consultation with the President of the People's Committee of the province or the city directly under the Central Government.

Article 8.-

1. The Ministry of Construction shall have to exercise unified State management over the business of renting houses to foreigners, preside over and cooperate with the other ministries, ministerial-level agencies, agencies attached to the Government and the People's Committees of the provinces and cities directly under the Central Government in the exercise of State management of the activities in renting houses to foreigners in Vietnam.

2. The People's Committees of the provinces and cities directly under the Central Government shall have to:

a/ Effect administrative management and direct the specialized agencies in the localities to carry out well the function and task of monitoring, controlling and supervising all activities of renting houses to foreigners in their territories.

b/ Appoint an agency attached to the province or city to take responsibility for the issue, extension and withdrawal of house renting permits, monitoring and controlling the activities in house renting to foreigners in their localities (hereafter referred to as permit-issuing agency).

c/ Concretely define the areas and places eligible for renting houses to foreigners in their territories.

d/ Draw up the plan and project for house building aimed at meeting the demand in houses for rent to foreigners.

e/ Authorize the establishment of enterprises or the registration of the business of renting houses to foreigners in their localities.

f/ Handle the violations as defined in Chapter IV of this Regulation.

3. The permit-issuing agency shall have to assist the People's Committees of the provinces or cities directly under the Central Government to manage the activities of renting houses to foreigners in the locality; to collect the permit-issuing fee, monitor and control the service of house renting to foreigners, and propose the authorized echelon to handle the violations as stipulated in Chapter IV of this Regulation.

Chapter II

PROCEDURE FOR ISSUING, EXTENDING AND ABOLISHING PERMITS, AND PRODUCING PERMITS AND CONTRACTS ON HOUSE RENTING

Article 9.- The renter (house owner or his/her representative) shall send the application dossier to the permit-issuing agency of the province or city where the house for rent is located. The application dossier shall comprise:

1. An application for renting house to a foreigner.

2. A resume of the renter certified by the administration of the ward or commune where he/she resides.

3. A notarized copy of the certificate of ownership of the house and of the legal use right.

4. A deed of delegation or accreditation (if any) as stipulated in Article 4 of this Regulation.

Article 10.- Within 30 days at the latest after receipt of the full and duly made dossier, the permit-issuing agency has to coordinate with the concerned agencies in the locality in examining the conditions of the house for rent as prescribed in Article 3 of this Regulation in order to answer the applicant whether or not he/she shall be issued the permit.

Article 11.- The house tenant may directly or through the house renting service enterprise for foreigners conduct the negotiation and fill the house renting procedure as prescribed in this Regulation. The application dossier shall comprise:

1. An application.

2. A notarized copy of the permit as prescribed in Article 5 of this Regulation.

Article 12.- When delivering the house to the tenant, the renting party must produce the permit and the house renting contract to the security and tax offices (at the district level) in the locality.

Article 13.- On expiry of the house-renting contract, if the contracting parties agree to extend the contract or sign a new contract, they have to obey the prescriptions of this Regulation.

Chapter III

RIGHTS AND DUTIES OF RENTING PARTY, TENANT, PERMIT-ISSUING AGENCY AND SERVICE ENTERPRISE

Article 14.- Rights and duties of renting party:

1. To pay different kinds of tax (license, turnover, profit, land and house taxes...) as prescribed by law.

With regard to the enterprises stipulated in Item 1, Article 1 of this Regulation, they must also remit to the State budget other supplementary regulating contributions as prescribed by law.

2. To pay application fee at the rate set by the Ministry of Finance.

3. To strictly observe the signed house-renting contract.

4. To create favorable conditions for the specialized agencies to discharge their tasks defined in Article 8 of this Regulation.

5. To be entitled to abolish the house-renting contract under the conditions stipulated in the contract or prescribed by law, but it must notify the house tenant at least 30 days in advance before the contract is annulled. The settlement of any dispute or any compensation therein shall be effected as stipulated by Vietnamese law.

In case of annulment of the house-renting contract, the renting party shall have to inform in time the permit-issuing agency, the security service and the tax agency in the locality.

Article 15.- Rights and duties of the house tenant:

1. To strictly observe the terms under the signed contract.

2. To register for temporary residence for himself/herself when coming to live or work at the house, and register for temporary residence for his/her guests staying overnight with the security service agency at the local ward or commune.

3. Not to assign the house-renting contract or to re-rent the house to another party.

4. To be entitled to annul the contract under the conditions agreed upon in the contract or as prescribed by law. The settlement of any dispute or compensation involved in the contract shall be effected according to the Vietnamese law.

Article 16.- Rights and duties of the service enterprise:

1. To carry out fully the conditions concerning brokerage and service for both the renting party and the house tenant under the contract.

2. To collect service fee (only one time) at the rate set by the Ministry of Finance and the commission fee as prescribed in Article 4 of this Regulation.

3. To discharge the duty of tax payment and other obligations prescribed by law.

Chapter IV

HANDLING OF VIOLATIONS

Article 17.- The enterprises, organizations or individuals that undertake the business of house renting to foreigners without permits shall be fined 50 million Vietnam Dong and shall be forced to end their activities. In case of serious consequences, they shall be prosecuted before law.

Article 18.- The enterprises, organizations and individuals having permits to rent houses to foreigners but do not have duly made house-renting contracts, or who do not fill the procedure for registration stipulated in Article 6 and Article 12, or whose permits and house-renting contracts have expired but they do not conform to the stipulations in Article 13 of this Regulation, shall be fined 20 million Vietnam Dong and shall be forced to fill all the procedures as prescribed. In case of recidivism, they shall be fined twice the amount of the earlier fine, and shall have their house-renting permits withdrawn.

Article 19.- The house tenant who violated the stipulations in Article 15 of this Regulation shall be served a warning and fined 2,000 USD (if the house is for dwelling), or 5,000 USD (if the house is intended as headquarters of a representative office, a company branch or an establishment for business activities). In case of recidivism, they shall be fined twice the amount of the earlier fine. In case of serious consequences, they shall be forced to end the house-renting contract and shall be dealt with according to Vietnamese law.

Those organizations and individuals that are not allowed to rent houses under the terms of this Regulation but that still rent houses in Vietnam, shall be served a warning and fined 3,000 USD (if the house is for dwelling), or 8,000 USD (if the house is intended as headquarters for a representative office, company branch or an establishment for business activities). They shall also be forced to end the house renting. In case of serious consequences, they shall be dealt with according to Vietnamese law.

Article 20.- A service enterprise which violates the stipulations of this Regulation shall be fined 20 million Vietnam Dong. If it causes damage to the concerned parties, it shall have to return the service fee and compensate for the damage. In case of recidivism or serious consequences, it shall have its business permit withdrawn.

Article 21.- Public employees of the State management agencies stipulated in Article 8 and the personnel of the service enterprise who deliberately contravene the stipulations of this Regulation, shall be dealt with according to law depending on the extent of their offense.

Chapter V

IMPLEMENTATION PROVISIONS

Article 22.- The agencies, mass organizations, social organizations and economic organizations that are not specialized in house renting business, and the Vietnamese citizens or foreign residents settling in Vietnam who are re-renting houses owned by the Vietnamese State, shall have to return all the money they have received as house rent to the State budget as from the date when this Regulation became effective.

The Ministry of Finance shall have to manage, control and supervise the collection and remittance to the State Budget of all the revenues resulting from the house renting activities of the organizations and persons stipulated in this Article.

Article 23.- The enterprises, organizations and individuals that have been issued permits to rent houses to foreigners as stipulated in the Regulation issued and attached to Decree No.389-HDBT on the 10th of November 1990 of the Council of Ministers are entitled, if the house renting contract has not expired, to continue to rent their houses until the end of the 31st of March 1996. From the 1st of April 1996 onward, if the house-owners wish to continue to rent houses to foreigners, they shall have to fill anew the procedure on house-renting as prescribed in this Regulation.

Article 24.- This Regulation replaces the Regulation on house renting issued and attached to Decree No.389-HDBT on the 10th of November 1990 of the Council of Ministers and takes effect on the date of its signing. The earlier stipulations by the various ministries, the ministerial-level agencies, the agencies attached to the Government and the People's Committees of the provinces and cities directly under the Central Government concerning house renting to foreigners which are contrary to this Regulation, are now annulled.

The Ministry of Construction shall guide the activities of the service enterprises for house renting to foreigners stipulated in Point e, Item 2, Article 8 of this Regulation.

Article 25.- The house renting activities concerning the diplomatic representations, consulates and representative offices of international organizations and non-governmental organizations in Vietnam (Diplomatic Corps in abbreviation) shall follow a separate regulation.

The People's Committees of Hanoi City and Ho Chi Minh City shall have to work out plans for the construction of separate residential quarters to be rented to the agencies of the Diplomatic Corps, and manage the activities of house renting to these agencies in their localities.

Article 26.- The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government and the Presidents of the People's Committees of the provinces and cities directly under the Central Government shall have to implement this Regulation.

On behalf of the Government

The Prime Minister

VO VAN KIET